Statistics

Buyers hold out for drop in property prices: Poll

By Xu Fan (China Daily)
Updated: 2011-04-12 13:59

Almost 50 percent of Beijing homebuyers estimate the prices will fall in the coming months after government measures to cool the market, a new survey shows.

Homelink, one of the largest property agencies in the country, surveyed visitors to the 2011 Beijing Spring Real Estate Trade Fair, which is deemed a key event by industry insiders.

The poll revealed 44 percent of potential buyers think that property prices will fall, 38 percent predict that prices will rise and 18 percent said there will be no change.

Only 13 percent consumers said they intend to buy a property in the next three months, while 65 percent said they will postpone their purchasing plans by six months, as they do not want to spend extra money if the price falls.

The wait-and-see mood has already had an impact on the market.

Figures from the Beijing Real Estate Trade Management website, an online platform managed by the government, show that just 918 new apartments were sold during the first 10 days of April, down 48 percent on the last 10 days of March and 84 percent less than the same period last year.

Zhang Yue, chief analyst with Homelink, said that speculators and buyers planning to purchase a bigger home account for 30 percent of the buyers, down nearly 60 percent since the government introduced eight measures to curb the soaring housing prices on Jan 26.

"A 'squeezing-out' effect has taken place, which will give more first-time buyers the chance to look for homes in a comparatively stable market," she said.

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Another survey conducted by the market research department of Homelink shows that 69 percent of prospective property purchasers are now first-time buyers, with investors accounting for 19 percent.

Ba Shusong, deputy director of the Financial Research Institute of the State Council's Development Research Center, said the market is quickly adjusting to the cooling measures. "Some real estate projects in large cities such as Beijing and Shanghai have cut prices by as much as 10 percent," he said.

However, nearly 50 Beijing projects exhibited at the 2011 Beijing Spring Real Estate Trade Fair have created a new average price record, reaching as high as 21,200 yuan per square meter, according to fair organizers.

Li Zheng, a Chaoyang resident eager to purchase an apartment before his wedding in May, said he will try to persuade his fiancee to wait for a couple of months to see if the price will go down. "The house prices are still high. We'll spend our parents' life-long savings on the down payment, so we should be very cautious," he said.